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From Adanna Nnamani, Abuja
Group Chief Economist of Afreximbank, Dr. Yemi Kale, has warned that Nigeria is underutilising more than $35 billion in diaspora remittances and pension funds that could transform the country’s infrastructure, industries and long-term prosperity.
Kale, who spoke at the 18th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja recently, lamented that diaspora inflows of $20.9 billion and pension assets of $14.7 billion remain largely idle, even as the economy struggles with rising debt service obligations and widespread poverty.
The Former Statistician-General of the Federation said the financial sector has failed to create the architecture needed to channel these long-term funds into productive sectors such as infrastructure, innovation and manufacturing.
Beyond remittances and pensions, Kale identified several other constraints holding back growth. He cited the country’s shallow credit system, with private sector credit standing at just 13 per cent of GDP compared to over 100 per cent in countries like South Africa and Morocco.
Nigeria’s tax-to-GDP ratio, he noted, remains below eight per cent, one of the lowest in the world, while debt service now gulps about 70 per cent of government revenue.
He also drew attention to the power supply gap, with an average of only 4,500 megawatts available to serve more than 230 million people, as well as an infrastructure deficit estimated at more than $100 billion. According to him, these bottlenecks cripple productivity, deter investment and weaken competitiveness.
The Afreximbank chief economist stressed that Nigeria’s missed opportunities are not due to a lack of resources but poor financial intermediation and short-term thinking. He pointed to a financing gap of $32.2 billion for Micro, Small and Medium Enterprises (MSMEs) and said the creative industries, Nollywood, music and fashion, remain starved of structured financing despite their global appeal.
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Kale argued that with deliberate reforms, Nigeria could reverse these weaknesses, noting that if the financial sector mobilises long-term capital, de-risks investments and expands inclusion, the country could sustain 7–8 per cent annual growth, create over 10 million jobs and achieve a $1 trillion economy by 2030.
He further highlighted the rapid growth of digital finance, which attracted over $2 billion in fintech investment in 2024, and mobile transactions that rose by 53 per cent. He said blockchain applications, data-driven credit scoring, and the Pan-African Payment and Settlement System (PAPSS) are already redefining how capital flows across Africa.
Kale urged Nigerian banks and financial institutions to lead, not follow, the push for transformation by moving away from short-term, low-risk instruments to bold, long-term investments in infrastructure, innovation and inclusive sectors.
According to him, “Nigeria’s missed opportunities are not due to a lack of resources, but a lack of financial architecture to unlock them.
“An economy can only grow as fast as its financial system can fund it, and Nigeria’s growth ceiling is being set by the depth and efficiency of its finance.
“Banks must shift from short-term profits to long-term value creation if Nigeria is to fully unlock its economic potential.
“Finance shapes the economy. It is the bloodstream of reform and development, the real economy follows the flow of finance.
